This morning Limelight officially launched their new whole site delivery product, branded LimelightSITE, directly targeting a market that has always been dominated by Akamai. Targeting E-Commerce, enterprise, government and financial companies, Limelight is looking to offer a competitive performance based service which is expected to be cheaper than Akamai's. While many in the industry have always said that the strength of Akamai's network lies in their performance when delivering small objects, clearly a debate is about to start now that Limelight has entered the market. While I'll leave it up to customers to be the deciding factor, I'll have a follow up post later today comparing the two services on a technology level.

For those not familiar with how whole site delivery is used, it's the ability to delivery more than just small objects like images. Whole site delivery includes all of the objects of the page like the text, scripts, images, as well as dynamic personalization elements, executed code and the rich media objects. For E-Commerce customers, this means delivering things like database acceleration, delivery of scripts and SSL transactions.

While Limelight's service won't be available until April, the company has already been offering the service to strategic customers and to date, has signed up over 160 customers in the past six months. While I don't yet have a sense of the average ARPU specific to these customers, we can expect Limelight to break out those numbers in the near term. While Limelight says they are not directly targeting Akamai customers and don't expect their product to be able to compete with Akamai for all whole site delivery needs, Limelight said that they expect LimelightSITE to satisfy about 75% of customers looking for more than just small object delivery. Like Akamai, Limelight agrees that their biggest competition will come from IT managers who want to build out the functionality in-house. Unlike video, which most IT folks don't want to touch, delivering smaller objects is something many enterprise companies try to keep in house.

Limelight is already aggressively targeting the financial markets and has already signed up folks like ING Direct, Deutsche Bank and is going to be actively going after finance, government and E-Commerce customers with specific marketing and ad campaigns geared toward IT managers and CMO's. It's also interesting to think about the positive revenue impact this new product could have for Limelight in regards to resellers like Global Crossing, which has a deep base of enterprise customers.

If Limelight executes correctly and is successful in signing up customers with the new service, there is a lot of upside for the company. Most importantly, it enables Limelight to diversify their revenue stream from more than just video and over time, will help them increase their margins. Whole site delivery and small object delivery in general has higher margins, is less competitive with fewer vendors in the market and leads to a lot more profitable business like professional services. While Limelight says that their product is "competitive in terms of speed and performance with any product on the market today for whole site delivery", customers will be the ones to let us know if that's the case. And with 160 customers already using the service, one has to believe that Limelight's product is clearly a fit for some segment of the market. If Limelight's service can show the performance level that Akamai can deliver, at a cheaper cost, it's bad news for Akamai as pricing pressure will begin to creep in to their business, just like we've seen with video. The real question is what percentage of Akamai customers is Limelight's new service a fit for and more importantly, how many of them will look at it as a viable alternative in the market?

Today, it's too early to know if Limelight can make a dent in Akamai's business for this service. Even if Limelight is successful, it's going to take them a few quarters to get the marketing out the door, get sales ramped up and start to brand themselves as being more than a CDN that to date, has really only been thought of for large objects, not small ones. I think by the fourth quarter of this year we'll have a pretty good idea on what impact this is or is not having on Akamai and twelve months from now we should have a very clear picture.

Either way it's bad news for Akamai, which has always dominated the market for these services with almost no competition. Even if Limelight doesn't grab a huge amount of Akamai's market share, it's still going to make Akamai's job of selling harder and cause them to have to explain the differences between their solution and Limelight's. While Limelight's offering won't have a direct impact on Akamai's revenue in the next few quarters, it's something to keep an eye on.

Look for my post later today next week, that explains the technical differences between the two services, which I'm sure will be at the root of the debate that some will use to determine who's service will have the better performance.

Related Posts

– Apple Moves To Dual CDN Vendor Strategy: Now Using Limelight With Akamai

– Limelight's Recent Network Buildout Lowering CDN Pricing, Impacting Margins

– Video CDN Pricing Stable In Q4: Discounts Given For Lower Bandwidth Tiers

Highwinds has confirmed that it made cuts to their headcount last week across all divisions of the company. While the company did not confirm the numbers, I heard about twelve folks were let go, which would be about 10% of the company. Highwinds say many of the cuts were due to consolidating their operations in Phoenix via some of their recent acquisitions.

While the company made it clear that the cuts were not made for financial reasons and that they plan to re-hire for some of the positions, some have speculated that investors could be instructing them to keep their costs down for the short term so that Highwinds can refinance their debt. While that's always possible, the company did go on record to say that, "we not in the market to refinance as our interest rates and credit agreement are too favorable". Highwinds does not rely on content delivery services as a large portion of their revenue and has good cash flow, expecting to be EBITA positive this year. The cash they generate comes from services outside of CDN and the CDN business they are targeting is for the most part not the low priced M&E business.

To date, Highwinds has raised $130M and the recent $70M raised went to acquisitions and debt. It plans to evaluate potentially making some small strategic acquisitions over the course of this year that would help layer more applications on top of their CDN services. If Highwinds can get through the next 18 months in a bad market, they should have a good shot at being around for awhile since they have a very diversified revenue stream and aren't selling CDN services based on a lowest price point.

NYC based The FeedRoom has been around for almost ten years and I still remember sitting down with them at Globix in 1998 helping them evaluate their business plan. In the past decade, the company has changed their strategy numerous times and prior CEO's Jon Klein and Bart Feder both re-focused the company on many occasions. Over the past year, new CEO Mark Portu is once again re-aligning the focus of The FeedRoom, but this time, is going to back to their core strength in the enterprise video market.

Last Friday, The FeedRoom launched their new website with a focus on showcasing their solutions and strength in the enterprise video market for asset management, video platforms and webcasting. Their new tag line "Built For Business" highlights the value in enterprise video which from day one, has always been The FeedRoom's strength. For a long time, customers found it very hard to explain what The FeedRoom did and it was nearly impossible to put them in a solutions bucket. They built custom players, did webcasting, built asset management platforms, shot video productions, did encoding, went after both entertainment and enterprise customers and did a whole host of one-off professional services work. It was very hard to tell what The FeedRoom's core strength was and their message to the market wasn't clear of who they were and what they wanted to be. The company was still getting the vast majority of their revenue from enterprise customers but their systems weren't truly setup to scale. Technology issues plagued the company and customers didn't know if the company would be able to raise more money.

In September of 07', Mark Portu stepped in as the new CEO, raised a sixth round of funding totaling $12M and executed on a plan to bring in more technology and marketing help. His first goal was to fix the issues with The FeedRoom's technology platforms and add the kind of scale needed for enterprise focused customers. In December, The FeedRoom acquired ClearStory Systems and added their digital asset management platform to their offering. The company added new technology and marketing resources and re-aligned all of their offerings into products and services focused around the enterprise vertical. The new website is a reflection of that and does a great job of clearly spelling out what The FeedRoom offers in the way of digital asset management and video publishing platforms.

Mark says that not surprisingly, corporate customers and media B2B is growing faster than media B2C. For me personally, I love seeing The FeedRoom delivering the enterprise video message externally. While the company never abandoned enterprise video, it's not been part of their marketing message for many years. With new marketing resources on-board, a new website and a clear company wide focus, customers and the industry should now have a better sense of what the kind of business The FeedRoom is going after. Not to mention, there is still a lot of enterprise video business taking place in the market and very few companies focus on the enterprise video space.

The FeedRoom has survived a lot longer than many of the other companies in this industry but at some point, they are going to have to turn profitable. They have come close at times, but have never really been able to sustain the momentum and make money. Over the years, they have been close to selling out on many occasions, but with their new round of funding and new branding in the market, now is the time for them to show the industry that they can be profitable as a stand alone company. It's anyone guess if they can, but with their new focus, if they don't overextend themselves, the margins on enterprise related business versus media and entertainment gives them a good shot at making it.

MLB.com just went live with their new 2009 MLB.TV media player and is showcasing for free their newly improved HD video stream and improved player controls. The streaming is being done using H.264 and the HD feed is a true 720p at 1280×720. They are using adaptive bitrate encoding ranging from as low as 164K to 3MB for the HD feed. The quality looks good at full screen, but I am seeing some pixelation with the 3MB stream. 

The adaptive bitrate stream, using the MLB next def plugin, uses HTTP
and pulls from multiple CDNs. This is being delivered from at least
Akamai and Limelight with Akamai delivering the non adaptive bitrate
stream by themselves.

The new player has a nice clean layout and changing from SD to HD is very easy by using the "video quality" setting in the player. Changing from SD to HD for me was very quick with a lag of about two seconds. If you are checking out the stream now and are having audio problems, like I am, the audio feed from YES is having problems, not MLB. So we'll have to give that some time to clear up.

The DVR like functionality of the player works great, with the ability to pause the stream and then pick it back up with absolutely no lag at all. Very nice. Overall, the kind of high quality player I would expect to see from MLB. I'd like to see the video quality a bit better at 3MB and will have to reevaluate the player when it's out of beta and when the audio is working properly. Stinks that the first game MLB uses as the test and the main audio feed from the broadcast is screwed up. There are only so many things MLB can control and the audio from the YES network is not one of them.

The one thing not working for me is the picture in picture. I can't get another game to load in the second window, but I don't know if that option is available today or not. There is another game going on now in MLB TV should it should be loading. Update: MLB said, "we haven't launched real-time highlights or made multiple games available" so the picture in picture functionality can't be seen yet.

Today at 2pm ET is another StreamingMedia.com webinar and this one is pretty unique since we have four online video platform companies who will be showcasing their solutions. Speakers from Brightcove, Kaltura, Ooyala and VMIX will all provide an overview of their services and we'll be doing an extensive Q&A session with viewers and all the participants.

With numerous online video platforms on the market, choosing a solution is becoming more and more difficult. Some offerings focus on content management and monetization, while others are geared towards enabling syndication and interactive advertising campaigns. So what features are right for your content? What kind of user experience can you expect to deliver? In this exclusive live web event, you'll have the opportunity to hear from four leading online video platform vendors and get an overview of each solution. Most importantly, you'll be able get answers to your own questions.

The webinar is free and you can sign up here. We're also giving away a TOMTOM GPS system to one lucky attendee.

Seattle based Grid Networks, best known for enabling content owners to get web videos on their TV through the Xbox 360 and PS3 is close to finalizing a deal to be acquired. While the company would not comment about any acquisition, multiple finance folks in the industry are already talking about the deal being completed in the next week or two.

While no one is discussing who they are being acquired by, sources say the purchasing company is based in NYC and focuses on the desktop video environment. If the deal gets finalized it will be interesting to see how Grid Networks was valued and whether or not it was a fire sale. From what I'm hearing though, Grid Networks is not out of cash and to date has only taken one round of funding for $9.5M in October of 2007.

Updated 4/16: Grid Networks has merged with Global Media Services.

I have one speaking spot open at the Streaming Media East show on Wednesday, May 13 on the subject of "Automation And Workflow Solutions For Transcoding Your Video Content". I've already got three great customers on the panel, Accenture, Yahoo! and Syracuse University and am looking to add one more. Please contact me ASAP if interested.Wednesday, May 13, 2009 – 11:45 a.m. – 12:30 p.m.

Automation And Workflow Solutions For Transcoding Your Video Content
While video consumption and distribution has grown exponentially in the past few years, converting and preparing this content for the digital realm was largely a 'black art' until recently, when several enterprise-grade solutions came onto the market. In this session, we'll identify those solutions, talk to some organizations that are utilizing them, and discuss cost and benefit to enterprises large and small. From high definition to mobile, this session will talk through the hardware, software, experience and cost associated with owning and operating these new sophisticated systems.